Las Vegas Sands, Venetian Casino unit tender for 11% 2010 notes

By Paul Deckelman

New York, Feb. 1 - Las Vegas Sands Corp. said that two subsidiaries, Las Vegas Sands Inc. and Venetian Casino Resort LLC, have begun a cash tender offer for any and all of their outstanding 11% mortgage notes due 2010 and are also soliciting the consent of holders of a majority of the outstanding principal amount of the notes to proposed indenture changes aimed at eliminating substantially all of the restrictive covenants and certain events of default.

Las Vegas Sands/Venetian, a Las Vegas-based gaming and lodging company, set a consent deadline of 5 p.m. ET on Feb. 14 and said the tender offer and consent solicitation would expire at midnight ET on March 1, with both deadlines subject to possible extension.

The company said holders tendering their notes by the consent deadline would receive total consideration for their notes, including the basic tender offer consideration for the notes, which will be determined, and a $30 per $1,000 principal amount of notes tendered. Holders tendering after the consent deadline but before the expiration will receive the tender offer consideration for their notes but will not receive the consent payment. All tendering holders also will receive accrued and unpaid interest on the notes up to but not including the payment date.

Payment for notes tendered before the consent deadline will be made on the early payment date, promptly after Las Vegas Sands/Venetian accepts the notes for payment. Payment for notes tendered after the consent deadline will be made promptly after the tender offer expires.

The basic tender offer consideration will be set according to a formula that includes a 50 basis point fixed spread over the yield at the pricing time (the second business day before the consent deadline; i.e., Feb. 25) of the designated reference security, the 2½% U.S. Treasury note due May 31, 2006. The tender consideration per $1,000 principal amount of notes validly tendered and accepted for payment will be an amount equal to (i) the present value on the early payment date of $1,055.00 per $1,000 principal amount (the redemption price payable for the notes on their first call date of June 15, 2006), and all scheduled interest payments on the notes from the early payment date up to and including June 15, 2006, calculated based on the assumption that the notes will be redeemed in full on that date, discounted on the basis of a yield to June 15, 2006 equal to the sum of (a) the yield to maturity on the reference security as calculated by the dealer manager on the pricing date, plus (b) the fixed spread, minus (ii) accrued and unpaid interest, to but not including the early payment date, minus (iii) the consent payment.

Tendered notes may be withdrawn and related consents may be revoked at any time before the consent deadline but not afterward.

The tender offer is being conducted simultaneously with an offering of new senior notes by Las Vegas Sands Corp. - the parent company of Las Vegas Sands Inc. and Venetian - and with an amendment to the existing credit agreement of the two subsidiaries that, among other things, is expected to increase their borrowing capacity under such a facility. Las Vegas Sands/Venetian expects to use the proceeds from these financing transactions and, possibly, existing funds, to fund the tender offer. The company expects to realize "significant" reductions in interest expense from these transactions.

The tender offer is subject to conditions, including the receipt of the required consents from the holders of at least a majority in of the outstanding principal amount of the notes and the execution of a supplemental indenture putting the proposed indenture amendments into effect, and the completion, along with related funding, of the announced financing transactions on satisfactory terms, so that Las Vegas Sands/Venetian receives sufficient funds to consummate the tender offer.

Goldman, Sachs & Co. is the exclusive dealer manager and solicitation agent for the tender offer and consent solicitation (call 800 828-3182 or 212 357-3019). The depositary for the offer is U.S. Bank NA. D.F. King & Co. Inc. is the information agent (bankers and brokers call collect at 212 269-5550; others call 800 769-5414).

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